Basic Needs

Basic Needs mans needs required for his survival.
Business Firm servers as the economys producing unit to

satisfy human wants with goods and services.
Capital materials used in the production of goods and service
including money.
Economic Analysis the process of directing economics
relationship by examining economic behavior and events and
determining the causa relationship among the data and activities
observed.
Economic Resources inputs used I the production of goods and
services.
Economic System the framework in which society decides on its
economic problems.
Economics a social science concerned with mans problem of
issuing scare resources to satisfy unlimited wants.
Empirical Validation the use of statistical evidence to prove the
validity of a hypothesis.
Entrepreneur organizes all other factors of production to be
used in the creation of goods and services.
Free Enterprise System a system in which all economic
resources are privately owned. Individuals are free to engaged in a
business of their choice.
Function depicts the relationship between two or more
variables.
Household is the basic consuming unit in the economy.
Labor human effort expended in production regarding basic
economic problems.
Land natural resource, not man-made, covering anything found
on or under land, water, forest, minerals, and animals.
Luxury Goods good that man can do without.
Macroeconomics (National Income Analysis) the branch of
economics that studies the economy as a whole.
Market context in which buyers and seller buy and sell goods,
service, and resources.
Microeconomics (Price Theory) the branch of economics that
deals with parts of the economy such, as the household and the
business firm
Normative economics an analysis of economics which deals
with what should be.
Opportunity Cost value of a foregone alternative of a specific
resource.
Positive Economics an analysis of economics which deals with
what actually is.
Right to Private Property the right of private individuals and
enterprises to own things of value.
Theory/Hypothesis an unproven proposition tentatively
accepted to explain certain facts or to provide a basis for further
investigation.
Variable a factor that is subject to change or variation.

Wants the various desires and needs of consumers that have to
the satisfied through the use of goods and services.
3 ELEMENTS ARE INVOLVED IN THIS OBJECTIVE OF SATISFACTION
Human Wants
Use of Resources
Technique of Production
NECESSITATES THE USE OF THE TOOLS OF ECONOMICS
PURPOSE OF ECONOMICS ANALYSIS
1.
Aggregate Demand the totality of a group of consumers

demand.
Aggregate Supply the totality of group of producers supply.
Ceteris paribus the assumption that other things are equal or
other things remain the same.
Demand reflects the consumers desire for a commodity.
Demand Curve a graphical representation of the demand
schedule that contains the same prices and quantities presented in
the demand schedule.
Demand Function shows how quantity demanded is dependent
on its determinants.
Demand Schedule the quantities of a good consumers are
willing to buy at various prices.
Directly Proportional means that both variables increase and
decrease at the same time.
Equilibrium Point point of equality of demand versus supply.
Inversely Proportional means that one variable goes up while
the other goes down.
Market a place where buyers and sellers interact and engage in

exchange.
Movement along the curve a change from one point to
another on the same curve.
Non-Price Factors also known as parameters; factors other
than price that affect demand or supply.
Price the value of a good in terms of money.
Price Ceiling the maximum limit at which the price of a
commodity is set.
Price Floor a minimum limit beyond which price of commodity is
not allowed to fall.
Shift of the curve a change in the entire curve caused by a
change in the entire demand or supply schedule.
Supply the amount of a commodity available for sale.
Supply Function show how quantity supplied is dependent on
its determinants.
Supply Schedule the quantities producers are willing to offer for
sale at various prices.
Surplus an excess of supply over the demand and for a good.

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Basic Needs mans needs required for his survival.

Business Firm servers as the economys producing unit to

Variable a factor that is subject to change or variation.

3 ELEMENTS ARE INVOLVED IN THIS OBJECTIVE OF SATISFACTION

Aggregate Demand the totality of a group of consumers

Market a place where buyers and sellers interact and engage in

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